Quote: (09-02-2014 01:55 PM)jimukr104 Wrote:
And yeah gov't s can NOT only confiscate(not guranteed anywhere) but they can flood the market worth gold to discourage people buying it--they did that in the 70's. TBH I think that is more likely what they would do again.
The gov'ts of the world(the modern world) have sworn that they will never have a backed currency EVER again--so they will together flood the market. What the 3rd world or banana republics do is another thing.
I don't think governments, and in particular, the U.S.G., are going to be able to confiscate precious metals this time around. People are not as naive as they were in the 1930s, and they don't trust the government one iota. The government would have a fight on its hands if it tried because there is a high correlation between PM stackers and ammo stackers. Besides that though, the government might have real difficulty even finding their PM to pry from their cold, dead hands. A lot of it would be buried who knows where or at the bottom of a lake.
As for flooding the market, again, I don't think that's going to happen. Most Western governments don't actually have the gold they say they do. Why do you think Germany couldn't get its gold back from the U.S.? Besides which, if they did try to flood the market, there is so much demand that it would be soaked up incredibly quickly, both from small players (most of whom will stack whatever they can at any price -- if you're convinced that gold is going to go to $20,000/ounce or the fiat apocalypse is coming, what's $3,000/ounce?) and from other governments, which brings me to my next point.
There is insatiable demand for gold in Asia, not only from small players, but from governments. Pretty much any significant non-Western government is stacking gold also. Where do you think Germany's, the U.S.'s, etc. gold is? It's in China, Russia, etc., and those countries are vastly under-reporting how much gold they have because they don't want to spook the U.S. out too much just yet, though the U.S. is kind of onto them and their plans to destroy the USD reserve currency status, which is probably a large part of their play in places like the Ukraine. Of course, China has its own issues, but essentially, it both wants to break the USD for geopolitical purposes, and so needs gold to do so, and also because it understands now what a terrible deal US Treasuries are and needs to put money into something else.
Of course, China and other countries all play the fiat game too, but at least initially, they will need something backing their bid to break the USD, and that's gold. Once they break the USD, then they might start playing the same silly games, but not necessarily.
Anyway, a much better play than gold right now is silver. The supply/demand equation there is crazy, especially with the industrial demand. I personally think stocks are still the best long term play if one can ride the bumpy market out and buy value, but I'm increasingly willing to sacrifice some long term returns there to get some precious metals in my portfolio. I'd like to bring precious metals, particularly silver, up to approximately 5% of my portfolio. There's one guy on Youtube who has $330,000+ in gold and silver. He's either extremely rich, or that's a pretty ballsy/mad all in move that I don't think I'd want to make. I could handle 5% of my portfolio going sideways for ten, twenty years and I wouldn't shed any tears over it, but it might be nice to have some real wealth actually in my hands.